Chinese Debt, Aid and Trade: Opportunity or Threat for Zambia?

Image: Flickr, Osrin
Image: Flickr, Osrin

This paper looks at the threats and opportunities of China’s involvement in Africa and Zambia, specifically relating to aid, trade and debt sustainability aspects, and offers policy recommendations that may enable ‘China in Africa’ to be beneficial for sustainable and pro-poor development in Zambia.

China is a rising player on the world stage and is set to shape the 21st century in very significant ways. The ripple effects of China’s economic ascendance over the past two decades have reached various aspects of the global economy. It cannot be ignored by countries such as Zambia, where this growing influence is strongly felt in the country’s social, economic and political economy.

The three aspects of the China–Zambia relationship discussed are: 1) Zambia’s debt, which is crucial because of the country’s bad history of indebtedness and difficulty in managing and paying back external debts. 2) China as one of the major sources of financing for Africa, involved in over 35 aid projects in Zambia, including agricultural initiatives and infrastructure developments. 3) Since 2008, the People’s Republic of China has increased two-way trade to $106 billion, making it Africa’s second largest trading partner.

17 Dec 2010